This document provides a summary of the key topics and content covered in the Edexcel A2 Business Studies Unit 3 International Business specification. It outlines the main issues students should consider for each topic, including why businesses seek international markets, the impact of China and India's growing economies, how companies decide which countries to target, and other practical considerations for trading internationally. The resource is intended to help both students and teachers understand the important concepts and case studies needed to effectively study this unit on international business.

1. Edexcel A2 Business Studies
Unit 3 International Business
Specification Resource Map
Key topics on the Edexcel Unit 3 Specification mapped
to the tutor2u Business Studies Blog

2. Unit 3 International Business
3.3 Unit content
3.3.1 Why does Students will consider why some companies wish to sell overseas
a business seek and could review case studies of companies that have done so
successfully or unsuccessfully.
international
markets?
Content What students need to know Teacher guidance
Product or market Extending the product life cycle Look at examples of companies that
conditions that may through selling in new markets or have sold a backward innovation to
prompt a business to of selling product innovations in developing countries, for example
trade internationally multiple markets, global sourcing, the windup radio, launched a product
limited growth in domestic markets, worldwide, for example Xbox 360 or
foreign competition in home markets, sought new country markets due to
improvements in transportation and domestic competition, for example the
communication links with countries. Body Shop.
Increasing trade liberalisation through This is a very short introduction as to
reduction of international trade why international trade is increasing.
barriers, ability to trade within a Students should consider the opening
trading bloc, for example the European up of new markets due to reduction of
Union. trade barriers by WTO, and the benefits
and constraints of trading within the
European Union.
3.3.2 Key players Students are to briefly consider how firms and individuals may
in the world be affected by the growing economic power of India and China.
Students should consider how a national business may seek to
economy
trade with India or China.
Content What students need to know Teacher guidance
What will be the likely Implications of their population Students should consider what makes
impact of the growing size, economic growth and export these countries economically powerful,
economic power of China rates, increased purchasing power how they impact on individuals or
and India on individuals, and foreign investment, predicted firms with their manufacturing exports
national and multinational economic power compared with US (China) and call centres (India) and how
firms in the 21st century? and EU, barriers to market entry, trade a national firm may seek to trade with
opportunities for UK firms, differences these countries (see articles and case
between China and India, for example studies on Cobra beer).
state ownership of firms.
Section C © Edexcel Limited 2010 Edexcel GCE in Business StudiesEconomics and Business

3. International Business Unit 3
3.3.3 How does a Students should consider the attractiveness of country markets to
company decide companies based on the product or service being offered. Students
are not expected to remember figures or details about countries
which countries to
in examinations, but may have to analyse such information if it is
target? provided in the examination.
Content What students need to know Teacher guidance
Assessment of country Assessment of potential country Assessment of market attractiveness
markets markets is based on corporate policy may be based on: geographic proximity
(which countries the company wants to of the market, government policies,
target) and market attractiveness. natural resources, commodity prices,
exchange rate movement, political
and legal system, level of economic
development (country ranking by
GDP and/or Human Development
Index), potential labour force, level
of technology and likely return on
investment.
Using one example case study,
students should consider whether a
product or service could be offered in
a particular country market and give
their recommendations.
Comparative advantage Advantages for a company of trading For example the advantages and
and the role of with a country which can produce a disadvantages for companies of using
specialisation by countries good or service more cheaply through call centres in India could be examined.
specialisation.
Edexcel GCE in Business StudiesEconomics and Business © Edexcel Limited 2010 Section C

4. Unit 3 International Business
3.3.4 Other This topic addresses the practical issues of trading internationally
considerations such as creating an international brand, how to sell and cultural
differences in doing business.
before trading
internationally
Content What students need to know Teacher guidance
Responsibility to Ethical decisions as to what and where www.justbiz.org and www.anitaroddick.
stakeholders to manufacture, balance between com provide useful resources and
capital and labour, where to sell, pay talking points on trading ethically.
and working conditions, environmental
factors, for example emissions, waste
disposal. Potential conflicts of socially
responsible and ethical behaviour with
profit-based and other objectives.
Social/cultural differences Different promotional message for There are numerous examples of
in doing business different countries, international companies getting their promotional
branding, distribution channel, joint message wrong when trading
ventures, pricing strategy for different internationally. It is important to
countries. emphasise that a business person
needs to know the social/cultural
differences in order to do business in
a certain country. Some companies
prefer to use agents as they have local
knowledge and appropriate language
skills.
The purpose of tariffs, Why tariffs, laws or import quotas Only a brief overview is required.
laws, import quotas. are used, for example to protect
domestic industries or balance of trade.
Constraints on businesses that these
barriers provide.
Section C © Edexcel Limited 2010 Edexcel GCE in Business StudiesEconomics and Business

5. International Business Unit 3
3.3.5 Globalisation This topic is intended as a brief introduction as to why some
companies trade globally and the similarities in global niches.
Content What students need to know Teacher guidance
Global industries Global strategy versus global Some industries such as banking,
localisation, role of takeovers/mergers clothing, tourism, aircraft, computers
in strengthening company position, are global.
sourcing, ability to balance resource
Students could cover all three topic
investments in countries.
areas in 3.3.5 through examination
of one company such as Microsoft,
Disney, Mercedes, Gucci.
Global marketing Concentration on product markets, Disney will concentrate on selling their
emphasis on the similarities of films to cinemas in countries where
customers’ aspirations or tastes there is an existing film distribution
and access to media. Promotional and similar media infrastructure.
message may be the same leading They may be able to use the same
to reduced average marketing costs. promotional message for their film in
Sales incentives used may vary due to each country reducing the average cost
differences in local market segments. of marketing. For some products, sales
incentives may be necessary due to the
use of different distribution channels,
for example agents or distributors.
Global market niches Companies may identify a target International trends or subcultures
market across countries that is much may exist for some products or
larger than a single domestic market, services, because they meet shared
for example for luxury goods. values and perceptions. For example,
the Mercedes brand is respected
worldwide, due to the innovative design
and quality of their cars.
Edexcel GCE in Business StudiesEconomics and Business © Edexcel Limited 2010 Section C

6. C Business Studies and Economics and Business unit content
3.3.6 Are This topic should enable students, through the examination of case
multinationals a studies, to look at the good and bad behaviour of multinationals
operating overseas and what can be done to control their actions.
force for good or
should they be
controlled?
Content What students need to know Teacher guidance
Benefits that How multinationals have contributed Students should consider examples
multinationals bring to to an improvement in local living of contributions to local economies
overseas countries standards, employment and economic from different companies, such as the
growth in overseas countries. Body Shop and Starbucks which pay
premium prices for produce.
Potential negative impact Influence on foreign governments www.corporatewatch.org.uk should
of multinationals on to gain concessions, exploitation give some topical examples of the
overseas countries of labour in developing countries, impact of multinationals, especially on
implementation of working practices the environment.
which would be unacceptable in their
home country, sale of unsafe products
to consumers, use of unsustainable
resources, degradation of the local
environment.
Can multinational firms be Political, legal or economic constraints, Students need only need brief
controlled? competition policy, pressure groups. knowledge of the possible ways of
controlling multinationals.
0 Section C © Edexcel Limited 2010 Edexcel GCE in Business StudiesEconomics and Business

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